newsworthy
U.S. logistics system
saw slow, steady
improvement in 2011
IN 2011, THE NATION’S BUSINESS LOGISTICS SYSTEM HAD ONE
of those years that people won’t feel the need to forget—but won’t feel
the urge to remember either.
The Council of Supply Chain Management Professionals’ Annual
“State of Logistics Report” presented by Penske Logistics, which chronicled the nation’s logistics output for the 23rd consecutive year, showed a
modest change over 2010 totals. U.S. logistics costs reached $1.28 trillion,
Logistics costs as a percentage of nominal gross
domestic product (GDP), a ratio often used to measure the supply chain’s efficiency, rose to 8. 5 percent
in 2011, up slightly from 8. 3 percent in 2010. In
2009, the figure had dropped to 7. 8 percent.
In the 1990s, as the nation’s supply chain was
shaking off the yokes of rail and truck regulation
and bringing free-market processes to bear on the
marketplace, a ratio in the single digits was hailed as
a breakthrough in logistics productivity.
Over the past three years, however, a low ratio has
come to underscore a significant decline in shipping
expenditures and transportation costs as shippers and carriers down-shifted in response to a severe decline in economic activity from the levels of five or six years ago.
The findings of the 2011 report, which were released June 13 in
Washington, D.C., paralleled what turned out to be a static year for the
nation’s economy. After a year of peaks and valleys, U.S. economic activity ended 2011 relatively flat over 2010 levels, with GDP growth rising by
an anemic 1. 7 percent.
Correspondingly, the freight transport industry started the year with
strong gains in volumes and significantly higher freight payments through
its first half, according to the report. However, the economy began to slow
down in July, with the only sign of strength being an earlier-than-normal
buildup of inventories ahead of the July 4 holiday, the report said.
Rosalyn Wilson, the report’s author, called 2011 a “rather unremarkable year” for logistics statistics. Still, her 25-page analysis was sprinkled
with more optimistic comments than were found in the last two reports,
which were distinctly downbeat. p. 18
YRC Freight touts faster
deliveries in wake of
network realignment
YRC Freight, the long-haul unit of less-than-truckload (LTL) carrier YRC
Worldwide Inc., said it has cut one day
off transit times on thousands of its
traffic lanes. The reduction follows a
network realignment that saw the unit
cease transporting shorter-haul traffic
to focus on longer-distance moves.
The announcement, made in mid-June, is the first public report card on
the unit’s progress since it implemented the network change on April 9. At
the core of the realignment was a
move to shutter YRC’s “Velocity
Network,” which had been created to
move its shorter-haul, next-day deliveries. Those shipments, which YRC
said account for a small part of its traffic mix, have been assimilated into the
company’s long-haul network.
The June announcement affects
24,000 YRC lanes in North America, or
slightly less than one-quarter of its continental network. Examples of affected
lanes include Indianapolis-to-Los
Angeles, with transit times reduced to
three days from four; Charlotte-to-Seattle, which has been cut to four
days from five; and Salt Lake City-to-Denver, reduced to one day from two.
All 24,000 affected lanes will experience at least a one-day shortening of
transit times, with some seeing times
reduced by two days, according to a
company spokeswoman.
One of the key objectives of the
network change was to reduce the
costs and delays created by having too
many workers handling the freight.
The company said it has eliminated
700,000 physical “touches” of freight
compared with April 2011, thus allowing it to improve delivery times and
reduce damage claims. ;
